Largest eCommerce shift ever as 85,000 stores launch online

New research has shown that the United Kingdom has experienced one of the most considerable changes that the retail industry has ever seen, with 85,000 UK businesses launching online stores over the past four months.

With Covid-19 lockdown restrictions forcing the closure of many brick and mortar stores, brands have had to look to eCommerce as a way to make sales, resulting in an enormous number of retailers adding new online stores. Fashion brands have been the biggest adopters of online shopping in recent months, with 8,665 retailers developing their digital presences by adding new ways for customers to buy their products online. Other industries aren’t too far behind with 7,129 new eCommerce stores for those in the manufacturing industry appearing, as well as the food & beverage industry being responsible for 4156 new eCommerce offerings.

Another trend that has come from this new situation is that companies are switching to the direct-to-consumer model through their eCommerce site. Before the pandemic, these companies would have favored distributing via third party channels. It is also worth noting that less than half (41%) of the businesses that shut down across the UK have now fully re-opened. The remaining 59% are either operating under restrictions deemed ‘severely revenue-limiting’, or haven’t opened at all.

Those who have made the switch to online have benefitted, with BDO’s high street sales tracker showing that online retail in June was up 102% in the UK, compared to the same time last year. This growth came during a month where non-essential retailers were allowed open across the country for the first time in weeks.


Although this level of growth is unlikely to last indefinitely, the pandemic has still managed to accelerate a long term move towards online shopping, with 17.2 million consumers in the UK saying they will permanently alter their shopping habits in favor of eCommerce. This was shown in a study from Alvarez & Marsal (A&M) , where it was demonstrated that many of those who starting shopping online for the first time during the health crisis feel that they will continue these habits into the future. According to A&M, this means an extra £4.5 billion for the UK online retail sector.

Shoppers who view Covid-19 to be a significant threat are nearly four times more likely to choose online shopping as their preferred way of purchasing items going forward. In the UK, 55% of people would fall under that category. In addition, it was found that 48% of UK consumers will be avoiding busy areas like shopping centres, due to “scepticism in the ability of retailers to reimagine the customer journey”.

Buy Now, Pay Later Experiences Lockdown Growth

Buy Now, Pay Later Growth

While the huge growth of eCommerce has been noticed by most multichannel brands during the pandemic, alternative credit firms operating ‘buy now, pay later’ (BNPL) schemes have enjoyed substantial growth of their own.

Both customers and brands alike have been increasingly eager to sign up or partner with BNPL firms during the quarantine period, with Afterpay reporting to have signed up over 1 million new active U.S based shoppers between March and early May, while Klarna has said partnership inquiries from brands are up 20%. Klarna has noticed that brands in the luxury fashion space have been particularly welcoming of the payment option.

BNPL firms give shoppers the option to turn larger purchases into a series of smaller transactions, with low-interest rates if paid back quickly. This makes more expensive items readily available to people who may have been required to save money to afford big purchases in the past. This can be especially helpful during a time of financial uncertainty, with consumers being able to replace household items that have broken at an inconvenient time, or even just help consumers afford the necessities – like groceries.

One worry for the payment providers are defaults from first-time users as they begin weathering a potential global recession, the first big test for many of these companies. Covid-19 has forced many of them to put stricter risk settings in place, which could push up loan rejection rates. Afterpay has reported their rejections have been similar in number to pre-covid levels though, despite changing its loan requirement to 25% payment up-front. The company says that an “overwhelming majority” pay on time, and those who don’t find themselves unable to receive any loans from the company in the future.

Fashion Brands Continue AR Investments


Luxury fashion brand Gucci is the latest to launch an augmented reality feature to allow shoppers to try-on items virtually, this time partnering with social media firm Snapchat.

Along with a number of recent announcements from Snap Inc regarding ads and sponsored posts, came the launch of a new lens which allows users to try-on shoes virtually. Gucci is now the first brand to partner with Snapchat on the lens, creating four virtual pairs of Gucci shoes that users can see themselves wearing. Snapchat has provided a ‘Shop Now’ button, allowing users to purchase the items if they like what they see. This feature has been made available for Shoppers based in the UK, US, France, Italy, UAE, Saudi Arabia, Japan, and Australia.

Sunglasses brand Bollé has also invested in an AR feature, partnering with Instagram to create a similar experience for trying on its Phantom model of sunglasses. Activating the AR experience is a little more difficult here, as users are required to scan a QR code that can be spotted in some of the firm’s marketing materials. The ability to use both front and back-facing cameras is what makes this feature unique. With the front-facing camera, users can see how they look with the sunglasses on their face, and take selfies or videos – whereas with the back-facing camera, users can get an insight into how the world looks while wearing the glasses. Users can even switch between the different lenses that Bollé offers in its glasses, such as high contrast, anti-fog, and photochromatic.

The pandemic has created a new demand for AR tools, as brands try to create ways of engaging with customers while socially distancing. Beauty brands are particularly reliant on providing experiences, like free in-store makeovers, in order to drive sales. MAC found a way to combat this problem using AR back in May, as it launched a try-on service for its lipstick, eye shadow, and foundation products as a tool on its website.